[INVESTMENT 101] Mutual Funds by FAMI

Hello Queen Bees!

     Today I will be posting something new; it's about how I deal with my finances. Totally different from my usual beauty product and foodie reviews right? Again, I am a no pro. I just want to share my experiences to somehow impart you with a bit of my knowledge about investments. 

     I began to study about investments when I struggled to pay off my piled up credit card bills. As soon as I was able to get out of my huge debt, I changed the way I think about my finances. I did my research, watched tutorials, read a lot of finance books, attended seminars. I am very thankful with Pesos and Sense, a TV show by GMA with a purpose to teach Filipinos to be financially literate. Thank God for Youtube, I was able to find the complete set of videos. I finished all the episodes and was so excited to venture on my first investment escapade. 

Mutual Funds

 

What first caught my attention is the investment called Mutual Funds. This is its definition according to Investopedia: An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Don’t let that definition intimidate you girlfriend! In layman’s term, it is a combined money of individuals or companies that are invested in other investment products that is managed by an expert called the fund manager. 

I was so happy to find out that you will only need 5,000php to open an account and start investing. Before, you would need a huge amount of money to invest in the stock market. Now, it is made possible through mutual funds. For just an initial amount of 5,000php, you can already invest and make your money work for you! Your investment will be combined with other individual's funds making a huge pool of money that will then be invested in other money-generating vehicles, thus calling it “mutual” funds.

FAMI

 

I researched about the best mutual fund company that I will entrust my money with and I found out about FAMI (First Metro Asset Management Inc.). Good thing though, my friend has already opened an account with them so it became easier for me to ask her about the how to’s. I know you are dying to find out about how I opened an account but hey, first, you must assess yourself about your risk appetite. It has different types that are easy to differentiate. Here’s what FAMI has to say about this:

•  If you are a conservative investor, you don’t want to take too much risk.  The most prudent choice will be the Save and Learn Fixed-Income Fund (SALFIF).  
• However, if you have ambitious financial goals, but you have plenty of time to wait, you may choose either of the two types:
• Save and Learn Balanced Fund (SALBF) — if you have between 2 to 5 years before needing the funds;
• Save and Learn Equity Fund (SALEF) — if you will not need the funds for at least 5 years.

What Type I Chose

Since this is going to be my first venture in investing, I want to be on the safer side. I chose the second one, balanced fund wherein funds will be invested in a mix of fixed-income securities and stocks. This is perfect for me since I want this for long term, not withdrawing anything from that account; moderate return, moderate risks. On the other hand, equity fund will be invested entirely in the stock market and I don’t think I can handle the volatility for now. This is best for investors seeking higher returns but of course, with greater risk. The third one is the fixed-income fund which is suited for investors who are okay with moderate income growth but with lesser risk. They have other types but it’s best to just focus on these three admitting that I myself is not familiar with the rest. *lol*

Here's How

Now that you have assessed your risk appetite, here’s how I opened an account:

1. I headed on to their website and downloaded all the forms that I would need. Click here to direct you to the procedures. Don’t forget to read all the necessary documents! Don't take my word for it! Get to know what you’re getting into!  
 
2. I downloaded and filled up these forms:

• Account Opening Form – Individuals
• Investment Application Form – Individuals
• Signature Card

  3. I submitted the documents to the nearest Metrobank branch which is an affiliate of FAMI. In my case, I was previously working for a company in McKinley Hill, Taguig so it was easier for me to submit all the requirements during my free time. I included a photocopy of my two government-issued IDs namely: TIN and Universal IDs.

 4. I paid my initial investment amounting to 5,000php via Metrobank deposit under their balanced fund account. Although upon checking, I believe now, they are only accepting payments via Metrobank payment slip and Metrobank Direct. They also offer payments via check or cash paid directly to their FAMI offices. Click here to find out more about their payment options. 

5. After submitting the requirements and paying my initial investment, I sent an email to FAMI@firstmetro.com.ph stating my request to open an account. I attached all of the files needed and told them that I also submitted the requirements to Metrobank McKinley for they will be the one to fax these documents to FAMI. The next day, I received a confirmation message stating that they have received my request.

After about a week, I received my Account Number and began to invest every month. I started May 2013 and until now I still make sure that I get to put in 1,000php monthly, noting to add more when I have extra. I am making use of Peso Cost Averaging (investing on a regular basis) and decided to keep my money there for 10 years or more. Hey! This will be perfect for your retirement fund!

Pros

• I love that it grows my money more than what savings accounts can do for me. Annually, banks only offer around 1% interest! Inflation rate today is around 4.4%! Talking about how inflation beats your investments! In mutual funds, it is dramatically higher although it doesn’t guarantee returns.
• It is so convenient to make additional investments in FAMI. I just use my Metrobank Direct Online and make use of its Bills Payment facility.
• I receive my receipts monthly via a courier and it gives me that sense of security knowing that my money is well-handled.
• I don’t need to study everything about stocks, bonds etc. All I need to do is to invest every month and my fund manager will do the rest for me.

Cons

• I am having a hard time registering in their portal. I believe that would be the easiest way to access my monthly Statement of Account. 
•  It was kind of confusing to deal with their customer service. I hardly get any replies when my concern is about my login or password to their portal. However, I commend their quick response when it comes to sending me my updated SOA.
• I want to go paperless with my receipts but I am not sure if FAMI offers this kind of facility. It’s a waste of paper resources and at the same time, it’s difficult to store all those receipts that I get every month. I believe you would need all of these during redemption so better keep these in a safe place.
•  It will take you about a week to withdraw your money so you should not treat this as your emergency fund. Click here to find out more about their redemption procedure.
• Because of the benefits of having a fund manager, of course, they will charge you. Based on experience, it’ about 2% of every investment I make. Not bad if I want to have peace of mind with regards to where I will invest my money on. Let the expert handle it.
• I hate the volatility of the investment. Today you’re up by 2%, the next day you’re down by 3%. But fret not! You will only lose the money if you withdraw it. My suggestion is to just invest it for long term and don't forget to invest every month. You’re money will surely earn tremendously. No way to go but up right?

I was hoping that in some way I inspired you to start investing! The best time to start is NOW! 

Happy & Wise Investing everyone!

xoxo,

Ish